1. Department of Higher Education and Training
Briefing on 2017/18
Annual Report
Presentation to the Select Committee on Education and Recreation
24 October 2018

2. Presentation Outline 1. Strategic Overview
2. Programme Performance on Predetermined Objectives
Achievements
Reasons for non-achievement and current status
3. Financial Information
A brief summary of each report
A summary of Financial Statements
Action Plan to improve audit findings
Impact of 2017/18 financial outcomes on Departmental operations

3. Overview of performance against targets
The 2017/18 APP had a total of 120 targets
Of these, 86 were DHET-specific deliverables, encompassing the following:
The development and review of steering mechanisms
System funding
Infrastructure development
Teaching and learning support
Partnership development
System oversight monitoring (performance, governance and financial management)
There were 34 system targets. These included areas such as access, success, transformation and other systemic areas of strategic interest to the Department

4. Strategic Overview
The Department remained focused on ensuring that the key goals of PSET are addressed to ensure that South Africans:
Have access to education and training of the highest quality;
Do not face barriers in receiving education and training, especially in relation to disability, gender, race and geographic location
Succeed in their academic endeavors
Receive education and training that is responsive to the needs of the economy and society
The year under review will be remembered for the December announcement of fully subsidized higher education and training for students from poor and working classes

5. Strategic Overview
In steering the system, various interventions were made during 2017/18, namely:
Consolidation of the Teaching Development and Research Development Grants to improve University Capacity. The Development Grant is intended to transform teaching, learning, researching and leading in public higher education institutions
The development of the Macro Infrastructure Framework to improve planning, monitoring and delivery of infrastructure at universities
Dedicating attention to performance reporting, financial management and the funding framework for TVET colleges
Strengthening governance oversight of programme and curriculum in TVET colleges
Development of a policy framework to improve TVET college qualification offerings

6. Strategic Overview
Our pursuit of improving service delivery amongst CET colleges in 2017/18 is evidenced by:
The introduction of a Service Delivery Framework for CET colleges
Implementation of teaching and learning improvement plans
The induction of CET college Council members to improve governance and management
The Department is also making steady progress in the review and integration of the skills development landscape. The National Skills Development Plan was approved as a framework to inform the process

7. Strategic Overview
The 2017/18 Annual Report provides the overall performance of the Department in terms of predetermined objectives and financial management:
Part A: General Information: pages 3-10
Part B: Performance Information: pages
Part C: Governance: pages
Part D: Human Resource Management: pages
Part E: Financial Information: pages 167
Summary of Performance
Of the 86 Department-specific targets, 81 (94%) were achieved
Of the 5 targets not achieved, 3 were in Programme 1 and 2 in Programme 3
Of the 34 PSET system targets, 24 (71%) were achieved

8. Programme 3: University Education
The purpose of this programme is to develop and coordinate policy and regulatory frameworks for an effective and efficient university education system, and it provides financial support to universities, the National Student Financial Aid Scheme and National Institute for Higher Education
The focus of the branch during the year under review was on:
Oversight on the university system performance in respect to areas such as access, success, transformation, etc.
Development of mechanisms to address deficiencies or challenges in specific areas identified in the university system (steering mechanisms)
Management of various funding grants

9. Programme 3: University Education
Performance against planned 2017/18 targets:
Of the 20 planned outputs for the 2017/18 financial year, 18 (90%) were achieved, including:
Review of the NSFAS Act completed - Regulations approved and published
Cohort Study Report on First-Time Entering Undergraduates in Higher Education (2000 to 2015) - published on website
Central Applications Service policy has been developed and approved

10. Programme 3: University Education
Oversight reports (15) covering the following:
HEAIDS programme
Financial health of universities
Foundation provision grant
Teaching development grant
Teaching and learning development capacity improvement programme
Research development grant
Research outputs
Infrastructure and efficiency grant
New universities earmarked grant
Performance of the system against Ministerial enrolment targets
Institutional governance
Staffing South Africa’s Universities’ Framework
Compliance of PHEIs with regulations
BRICS partnerships
Student leadership capacity development programme

11. Programme 3: University Education
Of the 20 planned targets for 2017/18, two (10%) were not achieved, namely:
Development of the National Plan for PSET
Reason:
The time frame had to be adapted due to the need to wait for the finalisation of the Fees Commission report and government policy decisions related to its recommendations
Changes in the Ministerial portfolio and a need to have their concurrence before releasing for public comment; delayed the consultation process
Corrective Action:
Planned consultations with the Minister (1st quarter of 2018/19)
Finalise the plan based on decisions on policy matters for approval by the Minister by the end of the 2018/19 financial year

12. Programme 3: University Education
Policy Framework on collaboration between professional bodies, government departments and quality councils
Reason:
Chief Director driving the project resigned; challenges in project management led to delays; draft is complete but required some revisions before submitting to the Minister for approval to be published for comment
Corrective Action:
Draft framework has been completed and will be published for public comments after approval by the Minister

13. Performance of HE Sub-Sector Performance indicator
Of the /18 targets, 11 (69%) have been achieved:
Performance indicator
Target /18
Actual
2017/28
1. Students enrolled in public higher education institutions (n)*
2. Graduates in Engineering Science from universities (n)*
13 000
12 386
3. Graduates in Human and Animal Health from universities (n)*
10 400
10 087
Graduates in Natural and Physical Sciences from universities (n)*
8 300
8 093
Graduates in Initial Teacher Education from universities (n)*
20 800
22 123
Doctoral graduates from universities (n)*
2 700
2 797
7. Proportion of universities meeting standards of good governance (%)
Baseline% ** established
8. Research Masters graduates (n)*
7 600
7 968
9. Success rates at Universities (%)*
78%
10. Higher Education undergraduate success rate (contact) (%)*
83%

14. University System Performance Performance Indicator
Target: /18
Actual /18
11. Higher Education undergraduate success rate (distance) (%)*
68%
12. Universities offering accredited TVET College qualifications (n) 1
13. University academic staff with PhDs (%)*
45%
14. Additional first-time entrants (black and women) to the academic workforce in addition to normal replacement and plans (n)
100
549
15. First year students in foundation programmes (n)
18 500
20 685
16. Eligible university students obtaining financial aid*
*2016 academic year

15. Reasons for underperformance on University system targets
Performance Indicator
Reasons for under performance
Students enrolled in public higher education studies at universities
There is a decline in enrolments at UNISA due to the implementation of their admissions criteria and a new online registration system
Graduates in Engineering Science from universities
There are fewer students entering university from basic education with the requisite mathematics results
Graduates in Human Health and Animal Health from universities
The Department will engage with institutions to identify blockages
Graduates in Natural and Physical Sciences from universities*
Proportion of universities meeting standards of good governance
The good governance score card was only approved in December The baseline will be established in July 2018
* Note: This may be related to the fact that there are fewer students entering university from basic education with the requisite mathematics results

16. Programme 4: TVET
The purpose of this programme is to plan, develop, implement, monitor, maintain and evaluate national policy, programmes, assessment practices and systems
The focus of the branch during the year under review was on:
Review of steering mechanisms to address deficiencies or challenges in specific areas identified for the TVET college system
Teaching and learning support
TVET college infrastructure development and maintenance
TVET college sector performance

17. Programme 4: TVET ALLOCATION TVET Budget allocation
TVET Compensation of Employees
Lecturing and Support Staff
College Management Staff
TVET Direct Transfers
Total Programme Funding
NSFAS Bursaries
Total TVET Allocation

18. Programme 4: TVET ALLOCATION
Funding Categories
2016/17
R’000
2017/18
Baseline Growth
Rate %
Compensation of Employees
4.5%
Transfers and Subsidies
4.2%
Total programme funding
4.4%
NSFAS Bursaries
5.0%
Total TVET Allocation
4.6%

19. Programme 4: TVET ALLOCATION 2017/18

20. Provincial Allocation Percentages
Province
Percentage
Gauteng
23.5%
Kwa-Zulu Natal
17.8%
Eastern Cape
14.2%
Western Cape
12.4%
Limpopo
11.4%
Mpumalanga
7.1%
Free State
North West
5.4%
Northern Cape
1.6%
Total
100%
Province
Percentage
Gauteng
23%
Kwa-Zulu Natal
18%
Eastern Cape
14%
Western Cape
12%
Limpopo
11%
Mpumalanga 7%
Free State
North West 5%
Northern Cape 2%
100% 20

21. Provincial allocation Percentages21

22. 2017/18 Headcount Enrolments in TVET Colleges

23. Programme 4: TVET Performance against planned DHET-specific targets
All 28 planned DHET-specific outputs for the 2017/18 financial year were achieved as follows:
Review of Frameworks:
Reviewed Funding Framework for TVET colleges
Reviewed departmental policy framework on TVET qualifications
Teaching and learning support:
A revised plan for the review of curricula within the TVET colleges
Plan for TVET college lecturer development

24. Programme 4: TVET Infrastructure maintenance:
Infrastructure funding model for TVET college sector
Infrastructure maintenance plan for TVET college sector
A national infrastructure asset management system for TVET colleges
Roll out plan for the construction of nine TVET college campuses

25. Programme 4: Infrastructure
Infrastructure maintenance:
Infrastructure maintenance plan for TVET college sector
50 Colleges have completed Asset Register
48 Colleges have completed first round of maintenance plans
A national infrastructure asset management system for TVET colleges
TVETNIAMS software licensing approved
Data test completed on software
18 Colleges have submitted Site Plans

26. Programme 4: Infrastructure
Capital Infrastructure:
Roll out plan for the construction of nine TVET college campuses
12 of 16 sites awarded (3 initial and 9 new)
2 sites not awarded (Vryheid & Nkandla B)
2 sites contracts cancelled (Giyani & Balfour)
Thabazimbi operational, Nkandla 98% (legal action in progress), Bhambanani phase 1 ready for occupation (86%)
Construction commenced on 6 sites (Graaff Reinette; Sterkspruit; Aliwal North; Umzimkhulu; Msinga; Lusikisiki; Nongoma)
Construction to commence at Greytown & Kwaqgikasi
Civil disruptions to site operations: Balfour, Aliwal North (Local Business Forums, local labour recruitment disputes despite extensive consultation and representative PSC’s

27. Programme 4: TVET Oversight reports (16) covering the following:
Conduct of public TVET college examination centres during national examinations and assessments (x4)
Eradication of certification backlogs (x4)
Compliance to recommended governance standards
Performance of students in TVET colleges
Implementation of strategic partnerships
Implementation of IT examination system
Student Support Services
Teaching and learning support

28. Programme 4: TVET There were 10 targets for the TVET college system
7 (70%) of these have been achieved:
Outcome indicator
Target
2017/18
Actual
2017
Headcount enrolments in TVET colleges (n) *
NC(V) L4 certification rates (%)
30%
41.7%*
N3 Certification rates (%)
55%
65.8%*
N6 certification rates (%)
N6: 40%
66.1%*
Number of months to issue certificates to qualifying candidates
3 months
3.4 months
Percentage of public TVET college examination centres evaluated in conducting national examinations and assessments in compliance with national policy
100%
100%*
7. TVET throughput rate
Establish baseline
33.47%
8. Number of qualifying TVET students obtaining financial assistance   *
9. Percentage of funded NC (V) L4 students obtaining qualification within
stipulated time
Establish baseline (2012 to 2014 cohort)
10. Percentage of TVET institutions evaluated on implementation of proposed best practice policies and guidelines issued by the DHET (%)
100% 
56%
*2016 academic year

29. Reasons for underperformance on TVET system targets
Performance Indicator
Reasons for under performance
Headcount enrolment in TVET college funded from other sources
There were fewer enrolments by TVET colleges in occupationally directed programmes than anticipated
Number of months to issue certificates to qualifying candidates
On average, certificates are issued to qualifying candidates within 102 days (3.4 months) predominantly due to the large volume of certificates that needs to be couriered.
TVET institutions evaluated on the implementation of proposed best practice policies and guidelines
Majority of TVET colleges experienced cash flow challenges due to a delay in NSFAS payments. This affected compliance ratings to the approved governance standards
Financial policy implementation was also slower than expected

30. Programme 5: Skills Development
The purpose of this programme is to promote and monitor the National Skills Development Strategy, develop a skills development policy and regulatory framework for an effective skills development system
Its focus during the year under review was on:
Implementation of the National Skills Development Strategy by SETAs
Governance of SETAs
Security infrastructure at INDLELA
Trade testing at INDLELA
Review of steering mechanisms to address deficiencies or challenges in specific areas identified for the skills development system
14 Targets if we unpack monitoring reports
i.e. 8 main targets + 6 System targets

31. Programme 5: Skills Development
Performance against planned DHET-specific targets
All 8 planned DHET-specific targets for the 2017/18 financial year were achieved as follows:
The National Skills Development Plan
Quarterly reports on the implementation of National Skills Development Strategy
A report on the governance of SETAs
A report security infrastructure development at INDLELA
Processing trade test applications within an average of 69 days as compared to the planned 100 days (this is an improvement from 120 days in 2016/17)
14 Targets if we unpack monitoring reports
i.e. 8 main targets + 6 System targets

32. Programme 5: Skills Development Performance indicator
5 (83%) of 6 targets in the skills development system were achieved during the 2017/18 financial year
Performance indicator
Target 2017/18
Achievement 2017/18
Number of work based learning opportunities
Number of new artisans qualified per annum
21 110
21 151
Number of new artisan learners registered nationally per annum
27 750
32 330
National Artisan Learners Trade Test pass rate (including INDLELA)
58%
54%
Percentage of national artisan learners who are employed or self-employed
60%
Proportion of SETAs meeting standards of good governance (%)
100%
14 Targets if we unpack monitoring reports
i.e. 8 main targets + 6 System targets

33. Reasons for underperformance on system targets
Performance Indicator
Reasons for under performance
National artisan learners trade test pass rate (including INDLELA)
INDLELA also tests a lot of self-funding candidates who broadly do not have sufficient workplace training experience as compared to those who go through formal SETAs or industry artisan training programmes

34. Programme 6: CET
The purpose of this programme is to plan, develop, implement, monitor, maintain and evaluate national policy, programme assessment practices and systems for Community Education and Training
Its focus for the year under review was on:
Developing a service delivery model for the CET college system
Developing a funding Framework for the CET college system
Reporting on teaching and learning in CET colleges
Policy framework for reporting by CET colleges
Monitoring and reporting on the CET college system performance
All six outputs/targets were achieved as planned

35. CET College System Performance Outcome indicator target
Both system targets were not achieved:
Outcome indicator target
Target
2017/18
Actual
Headcount Enrolment in CET Colleges (n)
Certification rate in formal CET qualifications (%)
38%
35,9%

36. Reasons for underperformance on CET college system targets
Performance Indicator
Reasons for underperformance
Headcount Enrolment in CET Colleges (n)
Poor advocacy and learner recruitment strategy
Certification rate in formal CET formal qualifications (%)
Insufficient learning and teaching support materials due to lack of funding. The current system of procurement through TVET colleges was not responsive to the sector

37. Programme 2: Planning, Policy and Strategy
The purpose of this programme is to provide strategic direction in the development, implementation and monitoring of Departmental policies and the human resource development strategy for South Africa
Its areas of focus during the 2017/18 financial year was on:
Oversight on the following:
Open Learning in PSET
Recognition of Prior Learning
Social Inclusion in PSET
Career Development Services
International Relations
Skills Supply and Demand
Information Management Systems
Statistics on PSET

38. Programme 2: Planning, Policy and Strategy
Performance against planned outputs/targets
All 12 annual targets were achieved:
NQF Amendment Bill was approved by Cabinet for submission to Parliament. The Bill provides for:
Verification of all qualifications or part-qualifications by SAQA
Formulation of criteria for evaluating foreign qualifications
Establishment and maintenance of separate registers of misrepresented or fraudulent qualifications
A separate register for professional designations
Referral of qualifications or part qualifications to SAQA for verification and evaluation
Offences and penalties which have a bearing on fraudulent qualifications

39. Programme 2: Planning, Policy and Strategy
Produced a List of Occupations in High Demand
To inform skills planning in the country to support the Department’s planning processes with respect to enrolment planning and resource allocations
Finalised the Strategic Policy Framework on Disability
Guide universities and colleges to create an enabling environment for people with disabilities
Ensure the attainment of the NDP target: 2% of people with disabilities having the right skill sets and obtaining relevant qualifications

40. Programme 2: Planning, Policy and Strategy
Produced two reports to inform planning within the PSET system:
Investment trends in PSET
Statistics on PSET
Initiated institutionalisation of career development
Produced oversight reports on:
Social Inclusion in PSET
Open Learning in PSET
Career Development Services
Status of international relations
Developed a Communication Strategy for student support services
Finalised the design of the Management Information System for public Community Colleges

41. Programme 1: Administration
The purpose of this programme is to provide strategic leadership, management and support services to the Department
Its focus areas in the 2017/18 financial year were:
Filling of funded vacancies
Improving the human resource recruitment and selection process
Management of disciplinary cases
Management of creditor payments

42. Programme 1: Administration
Performance against targets
9 (75%) of 12 targets were achieved as follows:
The Department has revised its Human Resource Plan during the financial year
Developed a plan to improve human resource recruitment and selection process
94,8% of funded vacancies were filled during the 2017/18 financial year
Developed a plan to reduce the number of days to resolve disciplinary cases
Developed a system to track invoices received from creditors

43. Programme 1: Administration
Performance against targets
Developed a remedial plan on audit findings in the previous financial year
All (100%) audit issues were attended to through an Action Plan
Department received an unqualified audit opinion for the 2016/17 financial year
ICT improvement initiatives were implemented as planned:
ICT strategy and system implementation
ICT improvement plan
Data centre infrastructure
Implementation of an ICT governance framework
ICT procurement plan

44. Programme 1: Administration
3 (25%) of the 12 targets were not achieved as follows:
Number of days to fill advertised positions
It took an average of 188 days to process appointments in 2017/18 financial year instead of the targeted 180 days
It is an improvement from 222 days in the 2016/17 financial year
The main reason for underachievement is the high volumes of applications
To mitigate this, an improvement plan has been developed and approved
Implementation of an e-recruitment system

45. Programme 1: Administration
100% of disciplinary cases resolved within 90 days
97% of disciplinary cases were resolved within 90 days
This is also an improvement from the previous year’s performance which was 22%
Underperformance is attributed to the postponement of cases and the shortage of trained Chairpersons
Corrective action:
Improvement plan has been approved
Conducting training on initiating, investigating and chairing disciplinary cases
Appointment of additional staff at head office and regional office to increase capacity

46. Programme 1: Administration
Percentage of invoices received from creditors paid within 30 days
97.96% of invoices were paid within 30 days
The reason is that there are delays in the processing of invoices that are eventually rejected due to wrong banking details
These must be corrected through the system before the payments could again be processed

47. Programme 1: Administration Actions in the 2018 Action Plan
Audit Action Plan in respect to ICT Audit findings
Findings
Actions in the 2018 Action Plan
User Access Management (Systems Controllers and Users)
Quarterly reviews for system administrators are being conducted by GITO and quarterly reviews for users are being conducted by business units (directorates that own systems). This is an ongoing activity
Information Technology Strategy not approved
The Information Technology Strategy was approved on January 2018
IT Risk Assessments not conducted
Risk assessments were conducted by GITO and the Risk Management unit on 07 June 2018
Environmental Management issues at INDLELA and Ndinaye House (Server rooms)
Access control registers have been put at both INDLELA and Ndinaye House server rooms. The server room at INDLELA has been upgraded and all fire safety measures addressed
Business Continuity Plan (BCP) not developed and not linked to the IT DRP
Supply Chain Management (SCM) processes are in place to appoint the service provider to develop the BCP

48. Financial Information

49. Annual Report: Financial Information
Financial information presented in the Annual Report comprises the following:
The report of the Accounting Officer
The report of the Audit Committee
The report of the Auditor-General
Financial Statements (including the Appropriation Statement, Notes to the Appropriation Statement, Statements of Financial Performance, Financial Position and Changes in Net Assets as well as the Cash Flow Statement, Accounting Policies, Notes to the Annual Financial Statements and Supplementary Annexures)
The focus on this section is on the following aspects:
A brief summary of each report
A summary of the Financial Statements
The Action Plan to improve audit findings
The impact of the 2017/18 financial outcomes on Departmental operations

50. Report of the Accounting Officer
The report of the Accounting Officer provides a summary of the financial affairs of the Department including an overview of significant events, key policy decisions and spending trends that includes the matters addressed by the relevant Branch Heads on the performance of each Branch
It further includes a narrative pertaining to services, capacity constraints and organisational arrangements alongside corporate governance arrangements endorsed within the Department
The report of the Accounting Officer is presented from pages 169 to 194 of the Annual Report

51. Report of the Audit Committee
The Report of the Audit Committee expresses the Committee’s views on the effectiveness of internal controls within the Department, the quality of reporting in terms of PFMA requirements, as well as the operations of Internal Audit and Risk Management within the Department
Based on the information contained in the Report, the Audit Committee has expressed its satisfaction with the unqualified audit opinion
The Audit Committee expressed concerns of some non-compliance regarding internal controls, information technology and performance information reporting
The Audit Committee regularly brings the matters of concern to the attention of the Accounting Officer and Executive Authority
Controls have been appropriately implemented in the majority of disciplines in the Department

52. Report of the Audit Committee
Improvements in controls were specifically identified in Supply Chain Management and the disclosures of financial information
A lack of controls within Human Resources still exist due to the magnitude of functions and large volumes of staff since the function shift. In some cases the required action plans were not implemented on time to prevent audit findings in full
Controls within IT has been identified as a high risk for the Department. There has been a lack of identifying critical risks and ensuring timely interventions to prevent instability within the IT environment
The detail of the Report of the Audit Committee is presented from pages 195 to 197 of the Annual Report

53. Report of the Auditor-General
The Department received an unqualified audit opinion regarding its financial statements.
No material misstatements were identified in the financial statements and no material non-compliance were identified with specific legislative requirements.
Material findings were, however, identified in respect of the usefulness and reliability of performance information of Programme 3: University Education, Programme 4: Technical and Vocational Education as well as Programme 6: Community Education and Training.
The findings are mainly related to inappropriate record management that did not allow the Auditor-General to confirm the reported achievements
Detail regarding the findings on performance information is available from page 200 and 201 of the Annual Report

54. Financial Statements: Appropriation Statement
The Appropriation Statement provides an indication of the Department’s spending against the final Appropriated Funds for the year
In summary, the position is as follows: R’000
Final Appropriation:
Including - Voted Funds
- Direct Charges
Actual Expenditure:
Including - Voted Funds
- Direct Charges
Variance (Underspending) (0.018%)
* Detailed Information per Programme and Economic Classification is presented from pages 208 to 223 of the Annual Report

55. Financial Statements: Appropriation Statement
Summary of variance of R million per programme:
Programme
R’000
Administration
3 346
Planning, Policy and Strategy
1 323
University Education
969
Technical and Vocational Education and Training
616
Skills Development
833
Community Education and Training
4 692
Direct Charges
240
Total
12 019

56. Financial Statements: Appropriation Statement
Summary of variance of R million per economic classification:
Economic Classification
R’000
Compensation of Employees (Natural attrition/Unfilled vacancies)
5 734
Goods and Services (Mainly Travel and Subsistence/Stationery)
3 169
Transfers payments (Favourable exchange rate for membership fee to the Commonwealth of Learning, University interest and redemption payments as well as Direct Charges)
654
Capital (Equipment)
2 462
Total
12 019

57. Financial Statements: Irregular Expenditure
Irregular expenditure is presented in Note 26 of the Notes to the Financial Statements (page 256 of the Annual Report)
The total irregular expenditure as at 31 March 2018 amounts to R million, of which R million was carried over from 2016/17 as reported in the 2016/17 Annual Report
An amount of R2.010 million from 2016/17 was condoned during the 2017/18 financial year
The irregular expenditure for 2017/18 is based on carry-through costs of contracts that were reported as irregular during 2016/17 for which final investigations were not completed as at 31 March 2018

58. Action Plan to Improve Audit Findings
Each Branch completed an audit action plan to address the control deficiencies based on the audit findings
These plans address the areas raised in the Audit Report in conjunction with all other matters identified during the audit resulting in audit queries
The action plan has been approved by the Director-General and progress will be reported on a regular basis to the Minister, Director- General and Audit Committee
The first report from Branches has been received and is currently being reviewed and consolidated by the Office of the CFO

59. Financial Statements: Impact on Operations
The level of spending did not have a negative impact on the operations of the Department
Strict measures had to be set in place to prevent overspending of the Vote
However, when the results of provisions, accruals and commitments are also taken into account, the Department could have overspent
The outcome of expenditure within the current economic climate is already placing similar pressures on the Department for the 2018/19 reporting period
Significant pressure is still experienced due to the additional responsibilities and function brought about by the TVET and CET function shift, including regional presence and the monitoring of the entire system

60. Re ya leboga